The big threat to so­cial sta­bil­ity


The Citizen (Gauteng) - - BUSINESS - Ryk van Niek­erk

The con­se­quences of non-pay­ment of grants will be dev­as­tat­ing, and pose a risk to so­cial sta­bil­ity.

Twenty years in jour­nal­ism has taught me never to pro­claim that some­thing has hit rock bot­tom. We live in a won­der­ful coun­try where any web­site or news­pa­per can solve any nov­el­ist’s writ­ers block, and any ‘the end is nigh’ dec­la­ra­tion al­ways seems to come back to haunt you.

But there is an event on the hori­zon that may plunge SA into a dark abyss from which it could take a very long time to re­cover.

It is the pos­si­ble non-pay­ment of around 17 mil­lion so­cial grants in April next year.

A lot has been writ­ten about SA’s so­cial grants. It rep­re­sents a ma­jor ex­pense to the fis­cus, around R150 bil­lion this year. Many ar­gue it’s not sus­tain­able, but in a 40% un­em­ploy­ment sce­nario th­ese monthly pay­ments are a foun­da­tion of so­cial sta­bil­ity. Apart from putting food on the ta­ble, th­ese pay­ments sus­tain eco­nomic ac­tiv­ity, es­pe­cially in ru­ral ar­eas.

Post Of­fice

April 1 2018 is D-day. It’s the day the South Africa So­cial Se­cu­rity Agency (Sassa) takes re­spon­si­bil­ity for pay­ments from the cur­rent ser­vice provider, Net1 owned Cash Pay­mas­ter Sys­tems (CPS).

On D-day a new en­tity will have to make the pay­ments, and from last week’s var­i­ous par­lia­men­tary pre­sen­ta­tions it’s quite ev­i­dent that Sassa won’t be able to do it.

There was one re­mark dur­ing one of the pre­sen­ta­tions that sent the long­est and cold­est shiver down my spine. It was a state­ment from Min­is­ter Jeff Radebe, head of the in­ter-min­is­te­rial com­mit­tee tasked with fix­ing this mess. He said, al­most mat­ter-of-factly, the Post Of­fice will de­velop a new IT sys­tem to pay the grants. I hope he over­sim­pli­fied the sta­tus of this new pay­ment sys­tem as it could take years to de­velop.

Such a sys­tem should be in fi­nal test­ing phase if it’s to be ready in April next year. If not, the non-pay­ment of grants looks like a real pos­si­bil­ity.

The con­se­quences will be dev­as­tat­ing, and will pose a risk to so­cial sta­bil­ity. It’ll make the cur­rent spate of ser­vice de­liv­ery protests seem like birth­day par­ties.

ANC self-de­struct

In some ways, it’s good for democ­racy to see the ANC in self-de­struct mode. It seems in­evitable that the ANC will split. But the op­por­tu­nity cost could be in­cred­i­bly high. Hope­fully some san­ity will pre­vail to de­clare the Sassa pay­ments con­tract a na­tional pri­or­ity be­fore it be­comes a na­tional dis­as­ter. I’m not too op­ti­mistic though, as Jac­ques Pauw’s book The Pres­i­dent’s Keep­ers clearly shows that the pres­i­dent has sev­eral agen­das – none of which in­cludes so­cial sta­bil­ity.

In­ter­est­ingly, the only “out of the box” so­lu­tion would be for Sassa to ac­quire Cash Pay­mas­ter Sys­tems from Net1, as this sys­tem has proven to be world class. This would be a tricky trans­ac­tion to ne­go­ti­ate be­cause as an­other Money­web col­league re­marked ... it will not come at a Black Fri­day price. But luck­ily, we have a pres­i­dent that is a ne­go­tia­tor par ex­cel­lence.

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